500 F.Supp.3d 1088
C.D. Cal.2020Background
- In response to COVID-19, City of Los Angeles Ordinance No. 186606 (Eviction Moratorium) temporarily bars residential evictions for nonpayment of rent due to COVID-19 and certain no-fault evictions during the emergency and for 12 months after; it preserves tenants' obligation to pay rent and allows landlords to sue for back rent later but prohibits late fees/interest during the covered period.
- AAGLA (Apartment Association of Greater Los Angeles), representing thousands of landlords (55,000+ properties in the City), sued the City asserting Contract Clause and Due Process challenges and moved for a preliminary injunction to enjoin the Moratorium.
- The City implemented an Emergency Rental Assistance Program (ERAS) (~$100M) and California later enacted AB 3088 (state eviction protections) that overlaps with and, in some respects, is broader than the City Moratorium.
- The district court applied the Contract Clause framework (substantial impairment; legitimate public purpose; reasonable tailoring) and the Winter preliminary-injunction factors.
- The court found the Moratorium likely does substantially impair landlords’ contractual expectations but held the impairment reasonable given the unprecedented public-health emergency; it also found AAGLA failed to show likely irreparable harm and that the public interest/equities favored denial.
- Result: Court denied AAGLA’s motion for a preliminary injunction (Nov. 13, 2020) without prejudice.
Issues
| Issue | Plaintiff's Argument (AAGLA) | Defendant's Argument (City) | Held |
|---|---|---|---|
| Contract Clause — substantial impairment | Moratorium deprives landlords of their primary remedy (eviction), substantially impairing lease rights | Moratorium leaves rent obligation intact, allows suits for back rent; landlord-tenant law is traditionally regulated | Court: AAGLA likely shows substantial impairment (reasonable expectations disrupted) |
| Contract Clause — reasonableness/tailoring | Moratorium is not reasonable — no contemporaneous rent requirement and no attestation requirement; Blaisdell requires rent payments | Moratorium addresses urgent public-health need, is temporary, preserves money judgments, and is reasonable in scope; ERAS relief exists | Court: Impairment is reasonable under the emergency; AAGLA unlikely to succeed on Contract Clause claim |
| Irreparable harm | Landlords will be unable to collect and may face insolvency/foreclosure; monetary harms will be unrecoverable | Economic injury is compensable by damages; AAGLA has not shown imminent, widespread foreclosure or insolvency | Court: No likely irreparable harm shown; economic loss alone insufficient; preliminary relief would not prevent harms alleged |
| Balance of equities & public interest | Injunction would protect landlords from economic loss | Injunction would risk mass evictions, homelessness, and public-health harms during pandemic | Court: Public interest and equities favor Defendants; deny injunction |
Key Cases Cited
- Winter v. Natural Res. Def. Council, 555 U.S. 7 (2008) (standard for preliminary injunction: likelihood of success, irreparable harm, balance of equities, public interest)
- Energy Reserves Grp., Inc. v. Kansas Power & Light Co., 459 U.S. 400 (1983) (three-part Contract Clause test: substantial impairment, public purpose, reasonable adjustment)
- Home Bldg. & Loan Ass'n v. Blaisdell, 290 U.S. 398 (1934) (upholding temporary contract-relief measures during an emergency)
- United States Trust Co. v. New Jersey, 431 U.S. 1 (1977) (deference to legislative judgment in Contract Clause reasonableness inquiry)
- Allied Structural Steel Co. v. Spannaus, 438 U.S. 234 (1978) (Contract Clause factors and limits on impairment)
- Sveen v. Melin, 138 S. Ct. 1815 (2018) (assessing impairment by reference to interference with expectations and contractual bargain)
- Rent-A-Ctr., Inc. v. Canyon Television & Appliance Rental, Inc., 944 F.2d 597 (9th Cir. 1991) (economic injury generally compensable; damages do not equal irreparable harm)
- Sundance Land Corp. v. Cmty. First Fed. Sav. & Loan Ass'n, 840 F.2d 653 (9th Cir. 1988) (foreclosure can constitute irreparable harm when property is unique)
- Cuviello v. City of Vallejo, 944 F.3d 816 (9th Cir. 2019) (irreparable-harm requirement does not collapse into merits even for constitutional claims)